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Ігор Вишневський Hot News
8 December 2024, 14:03
2024-12-08
TikTok is on the verge of being banned in the US. A detailed analysis of the future of the Chinese social network in America, which can be saved by Trump
The Chinese video application TikTok is on the verge of a nationwide ban in the United States, because on Friday, the country's Federal Court of Appeals supported the need for the sale of the social network or its filing ban if the sale does not take place.
As Bloomberg reminds us , in April, President Joe Biden signed a law that would ban the app in the US unless the Chinese owner relinquishes control over it. TikTok's parent company, ByteDance Ltd., was given until Jan. 19, 2025, to find a U.S. buyer and agree to a sale, which the Chinese tech giant has refused to do.
The Chinese video application TikTok is on the verge of a nationwide ban in the United States, because on Friday, the country's Federal Court of Appeals supported the need for the sale of the social network or its filing ban, if the sale does not take place.
As Bloomberg reminds us , in April, President Joe Biden signed a law that would ban the app in the US unless the Chinese owner relinquishes control over it. TikTok's parent company, ByteDance Ltd., was given until Jan. 19, 2025, to find a U.S. buyer and agree to a sale, which the Chinese tech giant has refused to do.
TikTok, ByteDance and content creators have waged a legal battle to block the law from taking effect, but so far have been unsuccessful. In September, the U.S. Court of Appeals for the District of Columbia Circuit heard TikTok's challenge to the law, but issued a ruling in December that ultimately upheld the exclusion or ban law. TikTok is expected to appeal the decision to the Supreme Court as the deadline to comply with the law approaches.
Why did Congress oppose TikTok?
Lawmakers are concerned that TikTok poses a threat to national security, as well as the safety of users in the United States. After all, China can require its companies to share any data with the government upon request. So there are fears that the Chinese government will be able to misuse the data of TikTok users.
What is TikTok's response?
TikTok has strongly dismissed those concerns and has spent more than $2 billion on a project that its representatives say blocks US users' data to China. The company's May 5 court filing challenging the law as unconstitutional said: “For the first time in history, Congress has enacted a law that imposes a permanent nationwide ban on Americans from speaking on a single platform and prevents every American from participating in a unique online community of over 1 billion people worldwide."
Will ByteDance really sell TikTok if it ultimately loses in court?
ByteDance has every reason to abandon the sale of TikTok's incredibly valuable (and growing) business. The Chinese government has also publicly stated that it will oppose the forced sale. In addition, separating TikTok's operations from parent company ByteDance is technologically almost impossible.
To further complicate matters, President-elect Donald Trump has said he opposes selling the app. At the same time, Trump changed his position, which he voiced when he was first in the position of president. Trump's opposition to the decision may now play an important role in the app's fate. Especially considering the president-elect's connections with some of ByteDance's largest American investors. Among them is Susquehanna International Group co-founder Jeff Yass, a Republican megadonor who owned $15 billion in shares of the Chinese tech giant.
Who could buy TikTok?
ByteDance has stressed that it does not want to sell its TikTok business in the US. But anyone who wants to buy the company will need a very, very large sum of money. ByteDance is valued at around $268 billion, and while TikTok's US business would certainly be valued at much less, it would still be worth between $40 billion and $50 billion. By comparison, Elon Musk paid $44 billion for X, the social media platform formerly known as Twitter, in 2022.
Such a high price tag excludes most potential buyers from the very beginning. Meta Platforms Inc. and Alphabet Inc. may seem like logical buyers, but they are mired in various monopolization disputes with regulators, effectively ruling them out.
Oracle Corporation was initially considered a likely buyer because the enterprise software company is already TikTok's US partner. However, Oracle has about $89 billion in debt, which also makes it unlikely that the company could afford to buy TikTok on its own.
Microsoft was one of the other leading candidates to buy TikTok's US business in 2020, but that deal ultimately fell through.
Can TikTok survive without the US market if it is finally banned?
Probably yes. On its website, TikTok touts that it is the #1 downloaded app in more than 40 countries. Although the US is a very large audience of over 170 million users, it is still only a fraction of TikTok's total of over a billion users.
However, the US is the most valuable market for social networks because of the large advertisers willing to pay to reach American audiences. And the US stance could put TikTok's other global markets at risk. There will be real concern on the Chinese social network that the fallout from this situation in the US could lure people away from TikTok to other alternatives.
The ban would also kill TikTok's big ambitions to expand the U.S. version of TikTok Shop, its e-commerce arm that combines online entertainment with impulse purchases. Even with intense regulatory scrutiny, Shop remains one of the fastest-growing parts of the company.
Who will benefit from banning TikTok?
The most obvious answer here is Meta, which owns Instagram. The latter is already trying to compete with TikTok in the Reels video format. If TikTok were to be banned for any significant amount of time, Reels would be the most obvious alternative for US users.
Trump, in turn, said he opposed a forced sale of TikTok because it would benefit Meta, which banned him from its platforms for two years in January 2021 after concluding that some of his posts had incited his followers to riot near US Capitol. But recently, Meta CEO Mark Zuckerberg may be losing his anti-Trump stance. They are known to have dined together at Mar-a-Lago in Florida on the eve of Thanksgiving.
It's possible that other video-focused services could also benefit from the ban, including YouTube, which is owned by Alphabet-Google and offers YouTube Shorts, another format similar to TikTok. In addition to attracting users, Meta and YouTube are likely to attract ad dollars from TikTok if the app no longer operates in the US. Shares of Meta and Alphabet jumped after the divestment bill passed the US House of Representatives.
If TikTok goes out of business in the US, X could also see an increase in users and advertising, although X owner Elon Musk, whom Trump has appointed as his adviser, has opposed a ban on TikTok.
How will the electorate, top Republicans and China perceive it?
Trump's position on what to ultimately do with TikTok has made things very difficult for Republicans. On the one hand, individual wealthy Republican donors like the aforementioned Yass have strong financial incentives to keep TikTok going. At the same time, a number of other Republican appointees to Trump's cabinet have previously led the political stance on banning TikTok. Accordingly, it is difficult for them to give up their position.
Banning TikTok is also politically unpopular in a country where half the population uses the app, and it is particularly popular with the powerful Gen Z voting audience. According to Pew Research last summer, support for banning TikTok has declined among U.S. adults.
In the context of a forced sale, one must also consider the potential response of China. After all, it is not clear how the Chinese government will react to the forced sale and whether it will affect trade and diplomatic relations between the United States and China. When the Trump administration pushed for the sale of TikTok years ago, China's foreign ministry said the precedent of buying a company under the pretense of national security could lead to foreign countries targeting American companies, calling it the opening of a "Pandora's box."
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Як завантажити відео з TikTok без водяного знака: три найпростіші способи
Якщо ви користуєтеся TikTok, то знаєте — зберегти відео легко, але в кутку буде назва застосунку й ім’я його творця. Зазвичай це не є перепоною, проте з різних причин можна зіткнутися з необхідністю завантажити ролик без водяного знака. Наприклад, ви створили власне відео в застосунку і хочете зберегти його без логотипа, а такої можливості немає. Утім, способів обійти цю проблему чимало.
